Dubai economy now threatened by virus

Published
8
State-linked industries face billions of dollars in looming debt repayments. — AFP/File
State-linked industries face billions of dollars in looming debt repayments. — AFP/File

DUBAI: Dubai built a city of skyscrapers and artificial archipelagos on the promise of globalisation, creating itself as a vital hub for the free movement of trade, people and money worldwide — all things that have been disrupted by the coronavirus pandemic.

Now, with events cancelled, flights grounded and investment halted, this sheikhdom in the United Arab Emirates is threatened both by the virus and a growing economic crisis. Under pressure even before the outbreak, Dubai and its vast web of state-linked industries face billions of dollars in looming debt repayments.

And though it was bailed out a decade earlier, Dubai may not be able to count on another cash infusion, given the crash in global oil prices.

“They facilitate the transport and the buying of things and the movement of people,” said Karen E. Young, a scholar at the American Enterprise Institute who studies Gulf Arab economies. “That’s not the world we’re living in right now.”

Dubai’s dedication to global trade is memorialised in the first sentence of the first article of its 50-Year Charter, something created last year by its ruler, Sheikh Mohammed bin Rashid Al Maktoum, who has overseen much of the city’s growth.

“Dubai is destined to be a crossroad between East and West, and between North and South,” the charter says.

Prior to the pandemic, it reached that status. Dubai International Airport for years has been the world’s busiest for international travel. Its vast Jebel Ali Port ranks high globally for its cargo operations.

Published in Dawn, May 14th, 2020

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